12 Detroit principals charged by feds in bribery, conspiracy scheme

A dozen current and former principals from Detroit Public Schools were among those hit with bribery and conspiracy charges by the federal government regarding a scheme to score kickbacks from school supplies that were rarely, if ever, delivered.

The scheme covers the time period between 2009 and 2014 and involves not just the 12 current and former DPS principals, but also the assistant superintendent of the DPS Office of Specialized Student services, Clara Flowers, and a company called Allstate Sales, an authorized school supplies vendor for DPS.

Flowers and the 12 principals have been accused of submitting fraudulent invoices for school supplies to DPS that were either never delivered or only partially delivered, according to complaints filed in the US District Court. In exchange for inaccurately reporting the delivery of these goods to DPS, Allstate Sales would receive payments from DPS, while the company owner Norman Shy would deliver kickbacks to the principals as well as Flowers, according to court documents.

The complaint claimed that Flowers first chose Allstate Sales as a vendor when she was the principal of a local school called Henderson Academy. When she became assistant superintendent, she continued to use the company as a vendor for various schools and continued to receive kickbacks from Shy, according to the prosecutors.

From February 2009 to January 2015, Flowers alone accepted nearly $325,000 in kickback payments, which ranged from $1,200 to over $14,000, according to court documents.

At times, Shy delivered only part of the supplies – auditorium chairs, raised line paper and other teaching material – listed in invoices sent to DPS. At other times, none of the goods were delivered at all, the government said.

The total amount of kickbacks delivered to other principals also ranged in price. Ronald Alexander of Spain Elementary accepted some $23,000, while Beverly Campbell of Rosa Parks School and Greenfield Union accepted about $50,000, according to the complaint.

Both Shy and Flowers face tax evasion charges in addition to bribery and conspiracy; the other principals face only bribery and conspiracy charges.

The charges come as officials in Lansing continue to debate the future of DPS, which currently suffers from a crushing debt in excess of $500 million, in addition to crumbling infrastructure. Michigan lawmakers are considering spending some $700 million to split the district in two, in order to repay the debts of DPS and create a new, debt-free district under new management.

On Tuesday, Michigan’s Republican Governor Rick Snyder signed a bill sending $48.7 million to DPS to ensure Detroit schools can remain open and operating until the end of the current school year. The district was set to run out of money by April 8, and would have had to shut down without the cash infusion.

“There was a pressing need in Detroit that lawmakers from all across the state came together to address, and they got it done quickly,” Snyder said in a statement. “This continues to demonstrate that the challenges at DPS aren’t just Detroit’s problem, they are concerns for all of Michigan. We are committed to academic improvement and long-term financial stability at DPS.”

Snyder also signed a new plan that would give the Michigan Financial Review Commission the authority to oversee Detroit’s school system once the emergency manager is removed. This is the same board that has helped Detroit manage its finances after it exited bankruptcy in 2014.